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Tue, 16 Oct 2018 14:17:09 +0000en-UShourly1https://wordpress.org/?v=5.0.1The Goods, Bads and Uglies of Automationhttp://get3dsmart.com/2018/10/16/goods-bads-uglies-automation/
http://get3dsmart.com/2018/10/16/goods-bads-uglies-automation/#respondTue, 16 Oct 2018 14:17:09 +0000http://get3dsmart.com/?p=4563This article about automation also appears on DigiFabster.com “Change happens when the pain of holding on becomes greater than the fear of letting go.” — Spencer Johnson, Who Moved My Cheese Automation is a fact of life. It’s happening in both the virtual and physical worlds and there’s no sign of it slowing down anytime soon. Innovative

“Change happens when the pain of holding on becomes greater than the fear of letting go.” — Spencer Johnson, Who Moved My Cheese

Automation is a fact of life. It’s happening in both the virtual and physical worlds and there’s no sign of it slowing down anytime soon. Innovative companies take the lead, putting increased pressure on their rivals. To remain competitive, even slow movers must eventually adopt.

But people are often a barrier. In fact, McKinsey estimates that 70 percent of change programs fail to achieve their goals, largely due to employee resistance and lack of management support. Sometimes it’s because they don’t share a common vision or purpose. Other times it’s because they realize that the goal of automation is to replace labor with technology.

The Good News About Automation

There are obviously benefits to automation. If there weren’t, companies would maintain their manual processes. Automating key business processes enables organizations to be more productive. In many cases this allows them to reduce their costs and grow simultaneously. It also helps them be more competitive. Over time even the most loyal customers gravitate towards vendors who successfully automate. They don’t really have a choice. It’s not personal, it’s business.

The impact on people can also be positive. Automation efforts don’t necessarily lead to a lower headcount. In many cases this frees up time, allowing employees to work on higher value tasks. When business processes are reduced to practice, they become standardized. Repetition is the sweet spot for automation. Value is created when people have time to be creative and focus on interpersonal communication. Companies that automate can afford to hire more people with those skill sets.

The Bad News

The downside of course, is that manual labor gets replaced with intellectual labor. People have to recognize this fact of life. If your job involves putting a screw in a hole repetitively, there’s a good chance a robot can do it more efficiently, and it will do the job 24 hours a day without complaint.

Resist all you want, but sooner or later the robot wins. Here’s why. If the company you’re screwing holes for doesn’t automate, they’ll become less competitive. Perhaps one of the other companies in their space will innovate more quickly. Or a new player will recognize the inefficiency in your market and build a new business model based on automation. Either way, sooner or later the company you work for will have no choice.

As employees, we all know this to be true. Jobs focused on repetitive tasks will eventually be automated. So we’re left with little choice but to continuously improve. To remain relevant, we need to be creative, technical and/or possess great interpersonal skills. Jobs requiring those skills will be harder to displace.

The Ugly News

It’s easy to visualize an example where a person completes a repetitive physical task. Say you’re working on a car assembly line and your job is to insert the screw that holds a door handle in place. It’s not too hard to imagine a robot doing that work instead.

But what about an office task? Say your job is to receive quote requests from customers, determine pricing based on their specifications, type up a proposal and send it to them for approval.Then upon approval, type up the order details and submit it for production. Sound pretty repetitive?

To some degree the ease with which that job can be automated depends on the complexity of your company’s offering. If the product or service is simple and contains few variables, it’s easy to automate. A web form can be created, the customer can enter their specifications and receive a price. If they like it, they place their order.

This happens every day with eCommerce. A customer goes to a retailer’s website, searches for t-shirts, selects a style, size and color and boom, two days later it shows up on their doorstep.

The perception is that eCommerce is only for consumers. The reality is that it’s an important tool for business-to-business (B2B) buyers as well. In fact, recent Forrester research suggests that in the U.S. alone, as much as $9 trillion in B2B transactions is handled through some form of eCommerce. This not only includes online websites, but also software-as-a-service (SaaS) procurement systems, purchase order, invoice and EDI networks.

As software continues to become more elegant, more complex products and services are becoming easier to automate. In the 3D printing industry for example, products can be highly complex. The design of individual products is ever-changing. There are hundreds of different 3D printers and thousands of material choices. Color and finishing choices abound. Some products are even customized or personalized.

Yet even in that industry, innovative companies are automating their quoting and order entry processes. In part they’re doing it because they recognize the competitive threat. If they don’t someone else will.

But they’re also recognizing an important relationship. More complex products result in more expensive manual processes. Whereas an easy product might take 5 minutes to quote, a more complex one might take 15 minutes or more. A person can only quote so many of those each day. Software runs 24/7 and never complains.

Move The Cheese

If you’re in a position where you’re doing a repetitive task all day, you’ve got a choice to make. You can either embrace change or stubbornly combat the inevitable. If you choose the former, do so with a plan in mind. Take a leadership role, helping your managers and coworkers recognize the repetitiveness of the task at hand. Be part of the team that analyzes and determines which tools do the best job of automating it. Lead the implementation and demonstrate progress.

In the end you’ll work yourself out of a job. So what? Give yourself a new, better job. Instead of monotony, find other higher value needs and fill them. Get creative, learn new technology and become a better communicator. You really don’t have a choice. In the long-term, those who help their companies become more productive and competitive will reap the rewards. Resistance is a short-term play. Eventually the status quo becomes too painful and when it does, those who refuse to change are left without a paycheck or a future.

“I guess it’s a lot better to initiate change while you can than it is to try to react and adjust to it. Maybe we should move our own Cheese.” — Spencer Johnson, Who Moved My Cheese

To learn more about software automation for 3D printing, CNC machining and other digital manufacturing technologies, visit DigiFabster today.

]]>http://get3dsmart.com/2018/10/16/goods-bads-uglies-automation/feed/0eCommerce is Key to Growth for CNC and 3D Printinghttp://get3dsmart.com/2018/08/31/ecommerce-cnc-3dp/
http://get3dsmart.com/2018/08/31/ecommerce-cnc-3dp/#respondFri, 31 Aug 2018 12:40:02 +0000http://get3dsmart.com/?p=4558B2B eCommerce is already worth trillions globally and the market is growing rapidly. Companies that offer CNC machining and/or 3D printing services can benefit from SaaS software that allows them to automate quoting, order entry and customer relationship management. Computer numerical control (CNC) and 3D printing share at least one common trait; they both require

]]>B2B eCommerce is already worth trillions globally and the market is growing rapidly. Companies that offer CNC machining and/or 3D printing services can benefit from SaaS software that allows them to automate quoting, order entry and customer relationship management.

Computer numerical control (CNC) and 3D printing share at least one common trait; they both require computer aided design (CAD) files for input. Aside from that, they may seem like night and day. In one environment, objects are made by removing material and in the other, they’re made by adding it. CNC is a subtractive manufacturing technology and 3D printing is additive.

But because they’re both digital, they share the same basic workflow. A file or design gets created, it gets sent to a machine, an object is made, the object gets finished, and it is shipped.

The front-end processes are also similar. Somewhere somehow, someone gets an idea. Once a design is created, it eventually must be prototyped and produced. A quote request is submitted to a service bureau or machine shop. The CAD file is analyzed and a quote is generated. If the customer likes what is offered, it becomes an order. All along the way, there is dialog between the two parties.

DigiFabster offers software that automates the process of quoting, order entry and customer relationship management. Until recently it was strictly for 3D printing and targeted at service bureaus and other industrial users. Recently, they announced that they would begin supporting CNC as well.

DigiFabster is pleased to announce that it will be extending the capabilities of its software-as-a-service solution for online quoting, order entry and customer relationship management to include Computer Numerical Control (CNC) milling applications.

This is pretty significant for several reasons. For starters, the solution has already been tested and proven in the 3D printing market. Using Digifabster’s software, companies in the space are seeing record revenue and astronomical growth (as much as 25% per month!) Tool & Die companies and machine shops are a much bigger market and are notoriously conservative. There’s a lot of opportunity for online sales there, especially when overall B2B eCommerce is already worth trillions of dollars globally.

But perhaps more compelling, we’re starting to see more and more crossover between the two industries. Service bureaus are adding CNC capabilities and machine shops are getting into 3D printing. Makes sense. Each has its own niche, and as mentioned before, the workflows are pretty similar. This necessitates a need for one common front-end. Again, from the press release:

“Many of our customers provide both additive and subtractive manufacturing solutions for their clients,” says DigiFabster CEO, Constantine Ivanov. “Many of them were telling us they wanted to use our software to manage both workflows.”

But is eCommerce Worth the Investment?

Setting up a B2B eCommerce solution isn’t as difficult as it used to be. In the past, you needed big tech resources and/or a dedicated partner. Software-as-a-service (SaaS) has leveled the playing field. Smaller companies can benefit from technology just like their larger competitors.

Also, think about the other benefits of eCommerce:

Your current business customers want to buy online. If you don’t enable them, they’ll go elsewhere

eCommerce opens up world of new customer opportunities

Quoting and order entry are some of the most time consuming tasks. Once they’re automated your staff can focus on higher value work

Time and again companies who’ve automated their front-end processes have found that they generate more revenue and grow more quickly than those who rely on manual labor. One is scalable, the other isn’t.

Software is both an offensive and defensive play. If you don’t invest, you risk falling further behind. If instead you take a leadership role, you can own your niche. Further, you can create relationships with customers that are very difficult to break. After all, he or she who owns the customer owns the data.

Whether you’re on the additive or subtractive side of the fence, or are sitting right in the middle, you should take a hard look at how automating your front-end processes and leveraging eCommerce could impact your business. With a little effort, you might find yourself on the path to significant growth.

]]>http://get3dsmart.com/2018/08/31/ecommerce-cnc-3dp/feed/0How eCommerce Helps 3D Printing Companies Grow Their Businesshttp://get3dsmart.com/2018/07/30/how-ecommerce-helps-3d-printing-companies-grow-their-business/
http://get3dsmart.com/2018/07/30/how-ecommerce-helps-3d-printing-companies-grow-their-business/#respondMon, 30 Jul 2018 07:00:02 +0000http://get3dsmart.com/?p=4544eCommerce has been a mega trend in retailing for over 20 years. Business-to-business (B2B) companies however, were slower to adapt. By 2005 they were starting to invest in eCommerce, but their solutions were nowhere near as elegant as those offered by retailers and other business-to-consumer (B2C) companies. In part, this was because their needs were

]]>eCommerce has been a mega trend in retailing for over 20 years. Business-to-business (B2B) companies however, were slower to adapt. By 2005 they were starting to invest in eCommerce, but their solutions were nowhere near as elegant as those offered by retailers and other business-to-consumer (B2C) companies. In part, this was because their needs were much more diverse. In many cases, a significant amount of custom programming needed to be done to meet their requirements. In the years since, enterprise resource planning (ERP) and other systems have become more elegant, allowing B2B companies to more easily sell online.

Current State of B2B eCommerce

Right now it’s estimated that the B2B eCommerce market is worth at least one trillion dollars. In fact, Forrester expects B2B eCommerce to grow at 8% per year over the next 3 years, reaching $1.13 trillion by 2020. Others like Deloitte, calculate the number much higher, forecasting that the global B2B eCommerce market could be worth as much as $2.77 trillion by then. They also note that utilization and growth have come from many different B2B markets, including manufacturing, professional and business services, and finance and insurance, among others.

The reasons for the growth are straightforward. First, for many B2B companies, eCommerce facilitates payment. Instead of having to invoice customers and manage collections, they get paid immediately, as soon as an order is placed. Further, eCommerce allows companies to acquire and service customers they couldn’t otherwise. In the Forrester research for example, 56% of executives surveyed said they have customers they can only profitably support online. Also, companies have found that their customers spend more and exhibit higher loyalty when offered an eCommerce option. For example, 60% of the Forrester respondents reported that their B2B buyers spent more overall when they had the ability interact with multiple channels. They also noted that omnichannel B2B customers were more likely to become repeat and long-term customers.

Why eCommerce is Critical for 3D Printing Companies

Aside from all the advantages listed above, eCommerce can benefit 3D printing companies in other specific ways. First, 3D printing differs from other products and services, in that business is less repetitive. Companies in this industry don’t work from a finite number of stock keeping units (SKU). They create new designs and want to produce them in small batches. This adds a significant amount of complexity to the order process. 3D printing companies need a lot of information to produce each order, while also ensuring that the design files they receive are in fact printable.

eCommerce helps reduce friction in two ways. First, requests for information are presented to clients in a user friendly way. Instead of asking a myriad of open ended questions like, “which material would you like?” eCommerce users can easily select from a drop-down list of options.

For example, consider Minnesota based ProtoLabs. The company’s sales grew by over $50 million alone in 2017 and nearly all of their $344.5 million in revenue came from eCommerce. The orders ProtoLabs receives can often include hundreds of manufacturing specifications. According to CEO, Victoria Holt, B2B e-commerce is all about the speed and ease of buying online. To enable that, they “began by digitizing the front-end.”

Further, eCommerce systems can include software that automatically inspect (and if necessary, fix) the files customers submit with their orders. For 3D printing service providers, this eliminates much of the time spent processing each order, especially with new customers.

In addition to removing friction on the customer’s end, eCommerce also helps 3D printing companies reduce cost. From quoting to file prep and order entry, labor costs add up. In a manual environment, expenses continue, throughout production. This is often referred to as “transaction cost.” Without automation, the cost to move an order through a facility can often reach $75 or more. With a highly automated workflow, those costs can be reduced to $15 or less.

Further, an investment in automation can also help improve the return on investment (ROI) of other initiatives. Marketing for example, should be a profit center – not a cost center. For every dollar invested, companies should get a return of two or more. It’s why the average B2B company spends 4% of revenue or more on marketing.

But, like any other business process, marketing must be optimized. The ides is drive as many qualified prospects as possible into a purchasing funnel, convert them into paying customers and then get them to repeat their behavior. eCommerce makes it easier to automate progress through the funnel, from interest through purchase and beyond.

As prospects enter, marketing content can be used to help educate, inform, and validate the solution offered by a 3D printing company. When eCommerce systems are connected to other applications like customer relationship management (CRM) software, much of this can be handled automatically. This compresses sales cycles, helping move prospects through the funnel more quickly. It’s also highly scalable, moving more prospects through without adding more front-end resources.

Finally, by combining eCommerce with other business processes, 3D printing companies can gain insights they wouldn’t otherwise. When quotes are automated for example, executives can more easily calculate their won/loss percentage. With this information, companies can make decisions about pricing, turn time and other variables. If they’re winning too many quotes they might consider raising prices. If they’re winning too few, they might consider revisions to their pricing or examining which capabilities are lacking.

As technology continues to improve, other emerging technologies like artificial intelligence (AI) might improve their ability to act on data-driven insights. For example, AI could help 3D printing companies analyze competitive market data, helping them dial their prices in even further. At first glance this might seem like a reason to avoid eCommerce. After all, if your pricing isn’t available online, it can’t be measured and tracked. But this is a myopic point of view. You either play offense or defense, and in business defense rarely wins. Those who quickly adopt and leverage technology typically win. Sticking your head in the sand is never a sensible strategy.

Implementing eCommerce is Easier Than Ever

In the past, implementing a B2B eCommerce solution was painful. Today it’s much easier. In part, technology has become more user friendly. But, B2B software providers have also become more focused, providing specific solutions for specific markets. DigiFabster has designed eCommerce software specifically for the 3D printing industry. It automates quoting and order entry by allowing managers to set prices and deploy a widget into any web page. Prospects who visit the page can enter their specifications, get pricing, and place an order. Behind the scenes, DigiFabster’s software automatically fixes issues that are common with 3D printable files. Together, these capabilities help reduce friction and reduce labor cost.

Like any other eCommerce platform, this helps clients drive incremental revenue. ZiggZagg for example, is a 3D printing service bureau located near Antwerp, Belgium. They implemented DigiFabster to help them automate quoting and order entry with the hopes of profitably attracting smaller jobs. ZiggZagg’s goal was to help fill gaps in the build areas of their machines, allowing them to operate more productively. In January of 2018 alone, DigiFabster’s eCommerce and digital workflow tools helped the company generate over $7,350 (USD) in new revenue, with an average order size of approximately $185. In terms of overall revenue, ZiggZagg is now billing over $50,000 monthly and is experiencing a 25% month-over-month growth rate.

But DigiFabster also takes it a step further by offering a built-in CRM solution that helps move prospects through the buying funnel. Once their data is captured the system can automatically follow up, educating potential customers and incentivizing them to act. DigiFabster also offers a comprehensive application programming interface (API) that allows it to connect to other software systems, including accounting packages and enterprise resource planning (ERP) solutions. This allows 3D printing companies to reduce their overall transaction cost, while also providing more comprehensive view of data that might not be visible in an isolated silo. Having a “big data” perspective can help companies glean insights they wouldn’t otherwise.

Want to see eCommerce for 3D printing in action?

We use DigiFabster’s software to offer HP 3D printing right here at Get3DSmart.

]]>http://get3dsmart.com/2018/07/30/how-ecommerce-helps-3d-printing-companies-grow-their-business/feed/0HP Launches New Line of Full Color 3D Printershttp://get3dsmart.com/2018/02/05/hp-launches-full-color-3d-printers/
http://get3dsmart.com/2018/02/05/hp-launches-full-color-3d-printers/#respondMon, 05 Feb 2018 14:00:19 +0000http://get3dsmart.com/?p=4501Today at SOLIDWORKS World 2018, HP announced a new series of 3D printers that further expand a portfolio of products that leverage Multi Jet Fusion. In addition to offering two different build sizes, the new Jet Fusion 300 / 500 series give customers the ability to print in black or white, and in full color.

]]>Today at SOLIDWORKS World 2018, HP announced a new series of 3D printers that further expand a portfolio of products that leverage Multi Jet Fusion. In addition to offering two different build sizes, the new Jet Fusion 300 / 500 series give customers the ability to print in black or white, and in full color.

I’ve written a lot about the huge opportunity 3D printing has with full color. I spent the first 20 years of my career working in the 2D printing industry and saw first-hand the monumental influence affordable digital color had on that industry. I believe it will have a similar impact on the 3D printing industry.

Color is too important.

In addition to being decorative, color helps us organize, group and understand information. It simplifies identification and improves safety. Color also enables branding and plays a vital role in sales and marketing. But color can also serve more utilitarian purposes. Color can improve how products are used and maintained. In the world of mass manufacturing, color adds value. Practically anywhere color can be used, it is.

For 3D printing, full color represents an enormous market opportunity.

When HP announced their first 3D printers back in 2016, I wrote an article covering the launch and noted that out of the gate, HP was launching Multi Jet Fusion (MJF) with devices that printed only in black, but making full color commercially available was high on the agenda. I added that with, “2D digital printing, the ability to affordably and quickly print in full color created a “hockey stick moment” for the industry. More than anyone, HP understands that.”

The Announcement

So today HP announced that it would expand its 3D printing portfolio with the goals of:

Further democratizing 3D printing

Allowing designers to use the same technology from prototype to production

Enabling functional parts in black, white, and full color

HP’s new Jet Fusion 300 / 500 series actually includes four new devices. Two of them print only in black and white. The other two print in full color. Build size is the other key differentiator. The smaller machines feature a build area of 7.5 x 9.8 x 10 inches. The larger machines print up to 7.5 x 9.8 x 13.1 inches.

Pricing for the Jet Fusion 300 series starts in the $50,000 range and a fully loaded version can top $100,000. HP expects to begin shipping the new machines later in 2018.

Target Customers

The ideal buyers of these new devices are small to medium-sized product development teams and design businesses, entrepreneurs, universities and research institutions.

With this product launch, HP is further demonstrating its commitment to making 3D printing more accessible. In the press release, HP’s President of 3D Printing, Stephen Nigro said that, “HP is committed to democratizing 3D design and manufacturing, unleashing new possibilities for millions of innovators around the world” and that the new 300 / 500 series gives them, “the freedom to create brilliant new parts liberated from the constraints of traditional production methods.”

More About HP’s New Devices

All of the new printers utilize HP’s Multi Jet Fusion 3D printing technology, which applies agents to change the properties of each voxel. The agents are dispersed onto a bed of powder through print heads which are similar to those used for industrial inkjet printing. They’re then activated using UV light.

The 340 and 540 printers can store and disperse four agents – including black and white, in addition to the fusing and detailing agents used by HP’s other 3D printers. The 380 and 580 printers offer four additional agents, which combine to provide full color.

Unlike the Jet Fusion 3200 and 4200 series printers, which utilize a removable build cart and separate processing station, workflow is contained within one device on the 300 / 500 series. It’s more compact, but can’t compete with the speed of its larger siblings.

HP says that the 300 / 500 series printers are capable of making a full bucket with 52 parts in about 15 hours and as many as 5 parts in around four hours. According to HP, parts are printed “in a fraction of the amount of time” they would take when printed using other methods like material jetting, FDM, and SLA.

In some ways the devices are complimentary. HP sees the 300 / 500 Series playing a role earlier on the in the product development process, and then later, as a product enters production, migrating to larger MJF machines.

The audiences are also different. As mentioned above, the 300 / 500 series are targeted primarily at small and medium sized businesses. Potential customers for the 3200 / 4200 series are typically larger OEM’s and service bureaus.

Applications for Full Color

So what will these new HP 3D printers actually be making? In my previous articles I’ve talked a lot about consumer products, where applications could include everything from interior decor items to fashion and tech accessories, jewelry, sporting goods, and more. Fishing lures, smartphone and other device cases, and specialty items all immediately come to mind.

Each rose was printed in two pieces, in white nylon plastic using SLS. Afterwards they were all hand-dyed to color. Quality was inconsistent and the process was expensive and slow. HP’s technology would be ideal for an application like that.

But color’s opportunity doesn’t end with consumer products. There are also plenty of commercial applications. Prototyping makes obvious sense, but color can also play an important role in the design of jigs, guides and other tooling used for mass production.

Further, color can be used for marking and identification.It can even be used to create wear indicators, reducing the cost of maintenance and downtime.

The Big Picture

For HP this is part of a broader strategy to disrupt the $12 trillion global manufacturing market. Like many in the industry, they foresee a fourth industrial revolution, driven by digitization. 3D printing will combine with artificial intelligence, the Internet of Things, robotics and other technologies to enable digital manufacturing and smart production.

Read our article about how emerging technologies are combining to change the way we make things.

Solutions driven by these technologies could accelerate the pace of innovation while redefining the concept of a supply chain. Further, they could provide companies with an unrivaled speed-to-market advantage.

At a recent Securities Analyst Meeting, HP announced that it would be introducing full color and metal capabilities. HP Inc. President and CEO Dion Weisler said then that the company was “doubling down” on its commitment to 3D printing.

As HP continues to build out its portfolio, they’ll continue to focus on new applications, driving higher print volumes. Full color opens a lot of opportunities – throughout the product development process – from prototyping into production.

At Get3DSmart, we help our customers identify and capitalize on big opportunities in 3D printing. Color could be one of the biggest yet! Whether its used for decoration, branding or a more utilitarian purpose, color plays an important role in determining how we acquire and use physical products, and we’re finally reaching the point where technology makes it possible to digitally manufacture full color products affordably.

How could full color 3D printing help your business?

Whether you’re looking to develop new products or improve the function and performance of existing products, color can be an important factor. When combined with a digital workflow it could provide an advantage your competition simply can’t match. We can help you get there.

]]>http://get3dsmart.com/2018/02/05/hp-launches-full-color-3d-printers/feed/0Will 3D Printing Add Another Block to the Blockchain?http://get3dsmart.com/2018/01/18/3d-printing-another-block-blockchain/
http://get3dsmart.com/2018/01/18/3d-printing-another-block-blockchain/#respondThu, 18 Jan 2018 21:44:27 +0000http://get3dsmart.com/?p=4375For 3D printing to go beyond prototyping and make real money from end-use part production, large-scale digital manufacturing networks will need to be constructed. Once the infrastructure is in place, blockchain could play a big role in helping protect intellectual property and manage licensing and payment. But if used strategically, the cryptocurrencies enabled by blockchain

]]>For 3D printing to go beyond prototyping and make real money from end-use part production, large-scale digital manufacturing networks will need to be constructed. Once the infrastructure is in place, blockchain could play a big role in helping protect intellectual property and manage licensing and payment. But if used strategically, the cryptocurrencies enabled by blockchain could also provide a new source of funding, putting more capacity in the right places, faster.

Recently Kodak announced a major blockchain initiative. Their idea is to use digital ledgers to help photographers manage usage rights and get paid for their work. Central to the plan are KODAKOne which will serve as an image rights management platform and KODAKCoin, a new cryptocurrency that will uniquely serve the photography profession.

Kodak’s stock nearly tripled after the announcement, raising their market value by over $150 million. But according to the company’s CEO, Jeff Clarke, this wasn’t just a gimmick to pump life into Kodak’s ailing stock. In the press release, Mr. Clarke noted that photographers have “long struggled to assert control over their work and how it’s used,” adding that terms like cryptocurrency aren’t just buzzwords, they “are the keys to solving what felt like an unsolvable problem.”

No matter how you cut it, blockchain is a buzzword and one that is creating short-term value for companies in many different industries. One extreme example is Biopix, which started out as an animal healthcare company, licensing and selling hormone solutions for the farm and livestock industries. In a pretty extreme pivot, the company was renamed RIOT Blockchain and changed its focus to become a strategic investor and operator in the blockchain ecosystem. In September, 2017 it was a $4 stock. By mid-December it topped $38 per share. It has since settled back down, trading today at under $17.

Other examples are also easy to find. Long Island Ice Tea Company changed its name to Long Blockchain Corp and poof, its stock jumped nearly 3x, from $2 per share to over $6. Also, Hooters parent company, Chanticleer Holdings Inc., announced it would use cryptocurrency for its loyalty program and saw a sharp increase in stock value. Some have even (jokingly) suggested that IBM officially add blockchain to their company name.

Blockchain & 3D Printing

What does any of this have to do with 3D printing? Well for starters I can think of a few companies in this industry that could benefit from a spike in their stock price. Maybe go with 3D Blockchain Systems or Stratasys Cryptocurrency?

On a more serious note, blockchain and the cryptocurrencies it enables, do create some big opportunities for the 3D printing industry. In fact Deliotte envisions use cases for blockchain throughout the product lifecycle. They refer to it as the “digital thread for additive manufacturing:”

Source: Deloitte University Press

IP Rights Management

In short, here’s how blockchain works. It provides a digital, distributed ledger that is fully documentable and attributable. Entries are permanent, transparent and searchable. Each new entry serves as a new “block” in the chain. With cryptocurrencies like Bitcoin and Ethereum, it serves as the data and security layer.

As the Kodak announcement alluded to, it can also play an important role in the management of intellectual property. Just like photographers, product designers also struggle with controlling the use of their work and ensuring they are fairly paid. In the past they would file for copyright, trademark and patent protection. When competitive offerings violated their IP, they had a choice to make. Allow it to happen, or use the legal means at their disposal to stop it.

Usually that decision was based on the size of the infringement and the amount of publicity it generated. Sending a “cease and desist” letter is easy. Suing someone to get injunctive relief and damages is a much more expensive proposition. Most people and companies won’t do it unless they see a potential return on that investment. Legal action against another company or a wealthy individual makes sense. They can pay.

But with 3D printing, the barrier to entry is so much smaller. Individuals all over the globe have become “makers.” In that environment, IP rights management and enforcement becomes much more difficult. As manufacturing becomes further democratized, the challenges are likely to escalate.

Blockchain can help in several ways. First it can provide designers with tamper-proof evidence of ownership. Once the design is registered to a blockchain, that information cannot be removed or changed. In theory, third parties, like service bureaus and retailers could see the complete chain of ownership of a work, including any licensing information.

It could also help in the patent process. In most countries, the rights to an invention typically belong initially to the first person to file a patent (“first-to-file system”). The best way to do this is in the U.S. is through an initial patent application. In Europe and elsewhere, ideas are typically registered with a notary. If you’re creating new inventions or code frequently, submitting every idea these entities can be impractical and expensive. Blockchain could provide an irrefutable way for inventors to document the date of their innovations, with far less time and cost.

Licensing & Payment

Further, blockchain could support licensing agreements and payment. The technology already provides for smart contracts, which are agreements that can be automatically facilitated, executed and enforced. The terms are defined in advance, allowing parties to do business without administrative burden or unnecessary cost. In the case of 3D printing, that could mean licenses that are executed immediately whenever a design file is viewed, edited or manufactured.

It can also be used to manage financial transactions. Consider Kodak for a moment. What they’ve really announced is an Initial Coin Offering (ICO). ICO’s started out as an unregulated way to raise capital for new cryptocurrencies, but now they’re also being used to fund other ventures. In Kodak’s case, it’s even more complex. They won’t receive any of the proceeds of the ICO, but they will create and benefit from a new market worth somewhere between $20 and $100 million. A company in their position could generate significant revenue for example, by charging transaction fees and serving as a currency exchange.

It’s not just established companies. Startups are also getting in on the act. Sirin Labs recently raised over $150 million with an ICO. Guess what they’re going to make? A smartphone with special features for cryptocurrency enthusiasts. The company says the product will fill a need in a fast-growing market: a secure device that can simplify the use of blockchain technology across multiple applications.

It makes my head spin.

3D-Token

Sirin isn’t the only startup trying to leverage cryptocurrency to raise funds and build out their business model. One example in the 3D printing industry is 3D-Token. They created an ICO to build a blockchain-based network of 3D printers. The goal is to have over 1,000 nodes and 3,000 3D printers on their network, giving their “Network Robots Workforce” a capacity of 22 million hours of production time and the ability to output over 300 tons of workable bioplastics annually.

Of course, in addition to serving as a form of currency exchange, 3D-Token plans to use the coins issued as part of their ICO as a form of payment on their network. Their Marketplace / Crowdfunding online platform will allow 3D-Token holders to “exchange their tokens peer-to-peer,” to buy capacity from the Network Workforce in order to complete print projects, and “participate in other crowdfunded projects” related to the 3D manufacturing world. Hmmm.

Moog

Moog Inc. is a worldwide designer, manufacturer, and integrator of precision control components and systems. The company is entrenched in several vertical markets, including aerospace, vehicles, marine, industrial machinery, alternative energy and medical equipment.

Moog is both a consumer and supplier of additive manufacturing. Through their long-term involvement with additive technologies, they’ve seen first-hand the power of a digital workflow. Moog recently announced plans to capitalize by building out their own digital manufacturing network.

In their view these kinds of networks have the potential to support:

High quality rapid prototypes

Entrepreneurs and start-ups with limited capital access

Customized/tailored goods, “quantity of one” production runs

Spare parts that can be printed by end users on-demand at the point of use and time of need to reduce inventory and improve availability (a powerful new option for supporting in-service platforms)

But Moog also recognizes several challenges to digitizing the manufacturing of physical products, including technology, engineering, and data management issues, in addition to other business impacts, like regulation, intellectual property protection and licensing.

Moog’s answer is to build a solution for digital-enabled parts. The system, called MOOG VeriPart® promises to provide secure, authentic parts for distributed supply chains. Based on blockchain technology, it will offer provenance and traceability, using a digital ledger to provide history, secure transport, and authenticity of digital part designs.

Moog says it has “made a deliberate business decision to be part of the disruption caused by 3D printing and blockchain versus being disrupted by them.” The firm “realized the greatest impact our business was going to be how these technologies upended the business models and supply chains employed by manufacturers today.”

More Chicken & Egg

I’ve written about this so much that I think I’m starting to moult. In this case, the chicken & egg are production capacity and asset management.

Obviously, a lot of different companies recognize the potential of blockchain in protecting intellectual property and managing payment, not to mention new revenue opportunities with cryptocurrency. But with 3D printing, that requires a production network that can operate at scale.

3D-Token and Moog both seem to understand this issue. 3D-Token is trying to tackle both problems simultaneously, by using an ICO to build both capacity and a more secure workflow. It seems like Moog is stacking blockchain on top of their existing production system.

While Moog is more focused on the industrial sector, 3D-Token appears to have their sights set on new product development. Both are attractive markets, but if McKinsey is correct and 5-10% of all consumer products (in applicable categories) are eventually 3D printed, they will account for over $500 billion in annual economic impact. That’s a big vein of gold that so far, no one is prepared to strike.

At the recent Inside 3D Printing conference in San Diego, I spoke on the topic of emerging technology, and specifically how new innovations like artificial intelligence and virtual reality will combine with 3D printing and other advanced manufacturing tools to change the way we make things. At the end, someone asked about the impact blockchain might have.

My answer was that blockchain is likely to play a big role in how assets are managed and might even be the future of payment. However, the bigger challenge is in building out a network of capabilities that can allow brands to produce what is needed, when and where it is needed, at scale.

I also reiterated my stance that successful networks will utilize production equipment, not a daisy chain of small desktop printers. The 2D printing industry proved that well enough.

Building a big-ass production network is a multi-million dollar play where return on investment is probably years or even decades away. Figuring out how to solve that dilemma seems like the highest priority. In the consumer segment at least, securing intellectual property and managing payment doesn’t seem very enticing if a brand can’t generate enough product sales to justify the all the pain that accompanies digital transformation.

Blockchain To The Rescue?

Maybe that’s another area where blockchain can benefit? Back in September, Forbes reported that so far in 2017, total investment in blockchain exceeded $4.5 billion, including the sale of $2 billion worth of coins or tokens. In 2016 by contrast, $256 million worth of tokens were sold. With that kind of growth, significant capital is being generated.

Perhaps manufacturers, brands and retailers will figure out how to leverage ICO’s to build out large digital manufacturing systems?

Raising cash is only part of the answer. Companies must also be able to execute in a highly fluid environment. Building a large-scale digital manufacturing network at this point in the technology curve requires an architecture that anticipates continued innovation. People, processes, and technology must be identified and incorporated into the system. They’re all likely to morph over time. In a scenario like that, where disruption is nearly constant, a culture must be in place that not only accepts, but actively embraces change.

In my experience, that excludes many existing brands and retailers. They talk a good game, but have been blindsided by nearly every new technology, from eCommerce, to mobile and more.

Eventually 3D printing will profoundly change how products are manufactured and sold. Companies who wish to compete in that new reality need to focus less on buzzwords and more on building out their networks. In the past, he or she who owned the data, owned the customer. If social media has taught us anything it’s that nowadays, he or she who owns the platform, owns everything.

]]>http://get3dsmart.com/2018/01/18/3d-printing-another-block-blockchain/feed/0Why 3D Printing Service Bureaus Must Automatehttp://get3dsmart.com/2017/11/09/3d-printing-service-bureaus-must-automate/
http://get3dsmart.com/2017/11/09/3d-printing-service-bureaus-must-automate/#commentsThu, 09 Nov 2017 15:04:28 +0000http://get3dsmart.com/?p=4246With all the business interest in 3D printing, the demand for service bureau work is increasing. Many will soon experience growing pains. To fully capitalize on their opportunity, service bureaus and others who provide 3D printing services will need to automate their workflow – especially with front end activities like quoting, order entry, and customer

]]>With all the business interest in 3D printing, the demand for service bureau work is increasing. Many will soon experience growing pains. To fully capitalize on their opportunity, service bureaus and others who provide 3D printing services will need to automate their workflow – especially with front end activities like quoting, order entry, and customer service.

I’ve seen estimates which suggest that globally, there may be more than 1,200 3D printing service bureaus. Some even say as many as 5,000. I’m not sure how accurate those numbers are, because they’re probably lumping makerspaces, fab labs and in-plant shops into that mix.

An “in-plant” is a term used to describe a 2D print shop that’s owned by a company (or other institution) and services internal customers. I haven’t heard a better term to describe them for 3D, so I’ll borrow the term for the purposes of this article.

These diverse types of facilities all have customers. With service bureaus, those customers are external. In other cases, most or all of those customers are internal.

Some of the work from those customers is predictable. In an educational environment, the work submitted by students is typically assigned. This can be helpful in a couple of ways. First, it can make things easier from a prep standpoint. The files are often standardized and reviewed by teachers or others before they’re submitted for printing. Second, the volume of work can be planned. You can accurately forecast how many orders you’ll receive over the course of a semester, for example.

In an industrial setting, things are a little more fluid, but you can still exert some control. Companies can define software tools and put standards in place for how files should be created and submitted to an internal shop. In addition, they can apply budgetary constraints and require staff to forecast their needs. Often this only happens once demand grows to the point of being painful, but when inefficiencies are recognized, things tend to get resolved quickly.

Drinking From a Fire Hose

Control is a luxury most service bureaus don’t have. When they’re ramping up, they typically endure periods of feast and famine. They go out and sell their service, get busy, stop selling and then run out of work. Depending on the markets they serve, this can get magnified by seasonality in their business. Retailers for example, tend to be busiest prior to the holidays.

If a service bureau is able to survive the startup phase, or gets lucky and falls into the right markets, volume builds. At that point it can be like drinking from a fire hose. Work comes at them from many different directions and it all has to be processed, produced and shipped.

Compounding this problem is the fact that the industry is moving from prototyping into production. Prototypes are high margin orders. With 3D printing, production is typically lower volume and requires quick turn. This creates a lot of small orders instead of fewer bigger orders. As I’ve mentioned before, the transaction cost that goes along with each order is fixed. It can cost the same amount of money to move a $50 order through your facility as it does a $5,000 order.

History Repeats

I’m sure that sometimes I seem like a broken record when I write about this, but print shops in the 2D industry dealt with many of the same problems. To remain competitive, they needed to become more efficient to handle the growing volume of smaller orders and they also had to drive transaction cost out of their businesses.

Labor is finite. There is only so much each person can do. As the number of monthly orders continued to rise, shops were forced to hire more people to manage them. But most of the time they’d lag behind the curve. They’d only add another body when backs were ready to break. The customer service manager would go to the owner and let them know of an impending mutiny. Eventually the owner would authorize another hire.

Then, when the natural ebbs and flows of business hit, the layoffs would start. If a company lost a big customer, several people might be impacted.

The Ah-Ha Moment

I’m telling you now that the same thing is likely to happen with 3D printing. Service bureaus will decide that it’s cheaper to solve workflow problems with labor than it is with technology. This will hamper their growth and create a lot of overworked, stressed out employees. Things will get even worse when they hit a lull.

The problem will eventually become so acute that companies will finally decide to act. They will start by trying to define the problem. Sometimes this goes well and other times it gets ugly, like when everybody describes the problem differently and blame gets tossed around. Sooner or later though, they will figure it out. They’ll have the proverbial “ah-ha” moment when the problem becomes obvious:

“Our workflow is so constrained that it’s causing customer and employee dissatisfaction, in addition to hampering our growth.”

Technology Is Always The Answer

With the problem defined, they can finally begin work on a solution. Technology becomes the logical answer. In today’s software-as-a-service (SAAS) enabled world, one would assume there’s ready-made solution for this problem.

20 years ago in 2D printing, that wasn’t the case. Companies had to make a build or buy decision. Some would try to license software and tailor it to fit their needs, while others would build their own solution, in-house.

Today it seems SAAS is everywhere. Want CRM? Sign up for Salesforce. Need marketing automation? Choose between Hubspot, Marketo, Pardot or a host of others.

But 3D printing is more like 2D printing was back then. Until recently, the industry was so small that no one was really focused on workflow. If companies wanted it, they had to build their own workflow tools. Service bureaus, universities, in-plant shops and others cobbled together whatever tools they could to allow their customers to upload files, get quotes and submit orders. Some of it was pretty slick. Others, not so much.

Web-To-3D Print Software

Web-to-3D print (W23DP) software is available to help companies manage estimating, order entry and a host of other tasks.

The implications can be profound. In a university setting, W23DP software can allow fab labs to manage the large influx of jobs they receive at the end of each semester. In an internal center, it can allow companies to better handle key points in the product development lifecycle. For service bureaus it can allow them to scale up their capacity and better plan future investments in hardware.

But for all of these organizations, there’s also a hidden benefit. Modern W23DP systems offer application programming interfaces (API’s) that allow software solutions to talk with one another.

API’s can be used in myriad different ways. They can help companies collaborate in real time. API’s can also help organizations effectively load balance between their internal capabilities and outsourcing. Perhaps most importantly, they can also give businesses access to data they’ve never had before, allowing them to effectively track and manage activity and spend across the enterprise, whether work is produced in-house or outside.

This type of 360 degree, holistic view of the organization is the stuff of executive wet dreams. Especially when they realize the kind of money they’re spending on 3D printing now and likely to spend in the future.

Why DigiFabster?

Prior to getting into the 3D printing market, I spent much of my career designing, selling and implementing web-to-print solutions for the 2D printing industry. I’ve learned a lot about what works and what doesn’t. Now I’m applying that knowledge in 3D.

I’ve conducted exhaustive research to find the best possible solution for automating front-end workflows. In my humble opinion, DigiFabster solves the problem in ways no one else can. The basic solution enables online quoting, order entry and customer management tools. The software also features a robust API that enables communication and reporting.

Further, the team at DigiFabster understands the importance of being able to customize the software to meet specific client needs. They’re skilled at integration and they know how to move fast without breaking things.

Get3DSmart’s partnership with DigiFabster provides even more value for clients who are dealing with antiquated, manual workflows. Together we have the knowledge, skills and ability to help companies quickly become more efficient, while greatly reducing the soft costs that frequently hamper growth. That’s a win-win-win.

]]>http://get3dsmart.com/2017/11/09/3d-printing-service-bureaus-must-automate/feed/32D Printing Companies Today, 3D Printing Service Bureaus Tomorrowhttp://get3dsmart.com/2017/10/27/2d-printing-future-3d-printing/
http://get3dsmart.com/2017/10/27/2d-printing-future-3d-printing/#respondFri, 27 Oct 2017 13:52:08 +0000http://get3dsmart.com/?p=4227A few years ago, 3D printing service bureaus seemed like a dying breed. Some were acquired by their corporate clients and others by their suppliers. But today things are looking up, and the future looks even brighter…especially if 2D printing companies enter the race. The Acquisition Firestorm In 2012, GE acquired Morris Technologies. Around the

]]>A few years ago, 3D printing service bureaus seemed like a dying breed. Some were acquired by their corporate clients and others by their suppliers. But today things are looking up, and the future looks even brighter…especially if 2D printing companies enter the race.

The Acquisition Firestorm

In 2012, GE acquired Morris Technologies. Around the time of the acquisition, Randy Kappesser, composites technology leader with GE Aviation said that Morris (and sister company, RQM) would “be fully dedicated to GE Aviation and other GE businesses. The companies will meet their obligations to their non-GE customers. After they are met, Morris and RQM will be fully focused on GE work.”

Morris was one of the U.S’s largest players in metal additive manufacturing. Poof. Off the board.

Merge Or Compete

Also around that time, 3D Systems and Stratasys, two of the biggest suppliers of 3D printing equipment, were also on an acquisition spree.

Between 2000 and 2015, 3D Systems made over 50 acquisitions. Several of them were service bureaus. In 2011, 3D Systems acquired Quickparts. They also bought Formero and Kemo, and in 2012, Innovative Modelmakers, creating the basis of what was originally called Benelux.

In the U.S., 3D Systems acquired Laser Reproductions, an Ohio-based 3D printing service bureau that catered to industrial design firms and OEMs. They also bought American Precision Prototyping. In the press release for that transaction, 3D Systems noted that APP (and sister company APM) were “expert providers of rapid prototyping and advanced manufacturing, product development and engineering services” and that the purchase further extended 3D Systems “service bureau operations in the United States.”

All of these (and more) eventually became part of 3D Systems Quickparts division. In a 2015 SEC filing, 3D Systems described Quickparts as follows:

“We provide on-demand custom parts manufacturing via our Quickparts® brand through a global network of facilities. We provide a broad range of production and finishing capabilities…In addition to the sales of parts, we and our sales partners utilize our on-demand parts operation as a sales and lead generation tool, and third party preferred service providers can also use our on-demand parts service as their comprehensive order-fulfillment center.”

Stratasys was also busy on the acquisition trail. In 2014, it announced the purchase of Solid Concepts and Harvest Technologies. They were two of the U.S’s largest 3D printing service bureaus.

Solid Concepts offered significant capacity and infrastructure with six U.S. facilities that were staffed by approximately 450 employees. They maintained a broad mix of technology for additive manufacturing and served a diverse customer base across a wide range of verticals, including medical, aerospace, and industrial, among others.

Harvest Technologies had over 80 employees, was the first additive manufacturing company in North America to become AS9100/ISO 9001 certified, and produced end-use parts for multiple industries.

In the announcement Stratasys noted that with the acquisitions, they were “creating a leading strategic platform focused on meeting customers’ additive manufacturing needs through an expanded technology and business offering.” They added that, “the combination of Solid Concepts’ deep knowledge of manufacturing and vertical focus, such as medical and aerospace, and Harvest Technologies’ experience in parts production, as well as materials and systems knowhow, together with RedEye, strengthens Stratasys’ direct digital manufacturing and parts production expertise.”

After the sale they were combined to form Stratasys Direct Manufacturing.

The challenge of course, is that both 3D Systems and Stratasys also sell equipment. With all of that consolidation and the threat of supplier competition, people were reluctant to open new service bureaus and the independent service bureaus that remained were less willing to buy their new machines.

The other problem for both of those companies is that they invested a lot of money to acquire all those assets. Most of the deals were undisclosed, but Solid Concepts alone could have cost Stratasys up to $295 million.

That’s a lot of debt, and debt equals overhead.

You could argue that Stratasys and 3D Systems can offset some of that by using their own equipment and materials (at cost). But that only gets them so far, and in most of those acquisitions they gobbled up a bunch of competitive gear. That puts them in an even worse position than most first movers. They have to deal with debt and switching cost.

New Players Mean New Opportunities

Image: Forecast 3D

Since then, several new 3D printing equipment companies have entered the fray. Carbon, HP and Desktop Metal all have fresh machines in the market. They each have a unique niche and none of them plan to compete with their customers.

Desktop Metal and HP have gone the more familiar route of selling and financing their equipment. While in the grand scheme of things, they’re less expensive than previous technologies, and for some applications FAR MORE productive, they still must be depreciated.

On a deal over $100K, that’s typically a five to seven year play. Will the technology still be viable that far out? Probably not, but for someone just starting up, that still punts the switching cost of upgrading at least three years down the road.

Carbon has taken a different approach. They’re renting their gear. That can lead to some tax advantages in the short term (operating cost vs. capital expense), and it can also reduce switching cost later on (assuming you keep the equipment the entire rental term).

In either case, it’s a big opportunity for startups to jump in and be more price competitive.

Now, some will complain a bunch of new players competing on price will result in margin erosion. They’re right, and the only way anyone can combat it is by selling on value instead of price.

Enter the 2D Printing Industry

None of this is new news. It already happened in the 2D printing industry. Over the last 30 years, suppliers competed, technology got better, early adopters got pummeled by switching costs, margins got whittled down, and lots of inefficient companies with poor value propositions failed.

But, the strong survived! They made smart investments, optimized their workflow, and differentiated their businesses.

They became masters. Their sales forces learned to sell consultatively, their marketing teams learned to use the web and eCommerce, their production teams learned that technology is more efficient than labor, and maybe most importantly, they learned to play well with others.

I’ve been evangelizing 3D printing to 2D printing companies since 2012. Even back then the writing was on the wall. Books, magazines, newspapers, and direct mail were all stagnant or on the decline. It’s gotten worse.

These companies are starting to open their eyes to new opportunities. They’re going beyond the forest and trees, taking an even bigger picture view.

While many in 3D printing are still debating the term (it’s not printing, it’s additive manufacturing!) 2D printers are starting to recognize the similarities.

In fact, 3D printing companies like MASSIVit are starting to tap into the trend. They’re targeting their machines at signage and display companies, providers of retail decor, and trade show and exhibit companies – all of which are key target markets for 2D printing equipment.

In an article I wrote for TechCrunch back in 2012, I made the case that 2D and 3D are a lot alike because the workflow is essentially the same. A file gets created, it gets sent to a machine, something gets produced, it gets finished and it gets shipped.

Certainly there are plenty of differences, some big and others small. But they’re not obstacles traditional 2D printing companies can’t overcome. They were going digital way before it was cool. They realize they’ll need new people, new processes, and new technology. But, they’ve been there and done that many times already.

Perhaps most importantly, they have access to capital. There are a lot of $10 to $50+ million printing companies out there. They have a lot of equity and great relationships with their lenders. If they wanted to invest a million or more in 3D printing tomorrow, the deal would be done by close of business.

]]>http://get3dsmart.com/2017/10/27/2d-printing-future-3d-printing/feed/0Speed-To-Market Is a BIG Competitive Advantage For 3D Printinghttp://get3dsmart.com/2017/09/26/speed-to-market/
http://get3dsmart.com/2017/09/26/speed-to-market/#respondTue, 26 Sep 2017 14:09:23 +0000http://get3dsmart.com/?p=42123D printing’s early success came with prototyping, but that market is finite. The real money is in production. In most cases it’s still more expensive than mass manufacturing. Eventually it will be more competitive, but even now, it offers a speed-to-market advantage that mass production can’t match. That’s a BIG opportunity. Say you’re a product

3D printing’s early success came with prototyping, but that market is finite. The real money is in production. In most cases it’s still more expensive than mass manufacturing. Eventually it will be more competitive, but even now, it offers a speed-to-market advantage that mass production can’t match. That’s a BIG opportunity.

Say you’re a product designer. You woke up the morning after Trump’s UN speech and thought, “I’m going to design a Rocket Man butt plug.” Don’t laugh. There are already Donald Trump, Kanye West and Tom Brady butt plugs, among many others.

If you were going to mass produce such a product, you’d go through several design iterations and probably use 3D printing to prototype it. Then you’d send your design to China to have it injection molded. Six weeks later you’d have 10,000 or more Rocket Man butt plugs. You’d probably list them on eBay, Etsy and other marketplaces and hope there’s still enough demand.

If your product sold well enough, you’d make a tidy profit. If it didn’t you’d lose your ass.

With 3D printing, you could go through the same design process, list your product and produce them in small batches, or even “on demand.” The cost of the product would be much higher, but you’d have significantly less risk and you’d get your product to market six weeks faster.

The printing and apparel industries have used this strategy for some time. Right now, you can go online and buy a Rocket Man t-shirt.

In some cases, products like these are screen printed (a form of mass manufacturing). In others they are digitally printed. Companies make those decisions based on demand. But there’s a big difference. With screen printing you can turn a job in one day. Injection molding, vacuum forming, machining and other forms of mass manufacturing typically take far longer.

Some might argue the economics. You might say, “I can produce that Rocket Man butt plug in China for pennies.” You could also print that Rocket Man t-shirt in China for under $5. Producing it on demand might cost $15 or more. Who cares? The company is selling it for $24.95!

The bigger challenge with the lowest cost argument is that in order to get that very low price, you need to manufacture at a very high volume. With t-shirts it gets even more difficult. You have to decide on an assortment of colors and sizes. Inevitably, you’ll end up with too many in pink or too few in size XXL.

Maybe that’s not a problem with butt plugs. I’m not an expert on the topic so I don’t really know. But, what I do know is that if you choose to mass produce, you’ll have to forecast demand. The math works really well at higher volumes. Say you bought them for $.50 each and planned to sell them for $5. If you sell 10,000, you’ll wish you made more. Even if you only sell 1,000, you’ll still break even. But, if you end up selling 100, you’re screwed.

Marketing In The Moment

Recently I read a linkedIn post by Tom Goodwin. If you recall, he’s the guy who famously noted that “the world’s largest taxi firm, Uber, owns no cars. The world’s most popular media company, Facebook, creates no content. The world’s most valuable retailer, Alibaba, carries no stock. And the world’s largest accommodation provider, Airbnb, owns no property.”

Anyway in this new post he said:

“If there was one single thing that you could claim to be most indirectly and directly responsible for modern woes, it would be the inability of media to make money in any way accept from attention. From fake news to clickbait, extreme opinions being normalized, to a refusal to cover the complex or apply nuance, a lot of what’s wrong is because media is forced into cheap, fast news.”

He’s right. But what struck me again is how much of an opportunity that creates for product designers to “market in the moment.” Every day it seems, a new trend creates new opportunities for products.

A quick scan of trending topics brought me to this series of Disney illustrations, reimagined for 2017. Nearly every one could spawn a product. From a Pinocchio selfie stick to a smartphone case featuring young Arthur so engrossed he can’t be bothered with Excalibur.

Licensing

It’s not the first time I’ve written about marketing in the moment. During a Super Bowl halftime show a few years ago, singer Katy Perry was flanked by two dancing sharks. One looked a bit off, and “left shark” quickly became a trending topic.

A designer created a figurine of left shark and began selling it on online. Katy Perry’s legal team found out and sent him a cease-and-desist letter.

In my mind it would have made more sense for them to embrace the phenomenon and to benefit from it financially through licensing.

Certainly the combination of licensing and crowdsourcing comes with equal parts good, bad, and ugly, but it’s not that hard to differentiate. More importantly, providing a sanctioned way to leverage branded content gives designers access and a financial incentive, while also helping brands protect their properties.

Speed-To-Market

Here’s the reality. Digital technology creates a speed-to-market advantage. As I noted in my article about left shark:

“3D printing allows people to create physical products from digital files. Because it’s digital, it removes many of the barriers typically associated with making and selling things. No big, upfront investment in manufacturing means nearly anyone can turn their idea into something real. No long lead times, means they can operate in the moment. Further, online marketplaces make it possible to list and sell nearly anything, quickly and with little effort.”

In many cases, speed-to-market is more important than cost competitiveness. The other guy might be cheaper, but it takes him far longer to get his product to market. If there’s an audience – whether we’re talking about Rocket Man butt plugs, left shark figurines, or the myriad of mundane, everyday products, speed wins. And often, it’s more important than the lowest possible price.

3D printing enables speed-to-market and that’s an instrumental benefit in the industry’s quest to move beyond prototyping into the real money of production.

]]>http://get3dsmart.com/2017/09/26/speed-to-market/feed/0Get3DSmart Partners With EquityNet to Solve 3D Printing’s “Chicken & Egg” Dilemmahttp://get3dsmart.com/2017/09/19/get3dsmart-partners-equitynet-capital/
http://get3dsmart.com/2017/09/19/get3dsmart-partners-equitynet-capital/#respondTue, 19 Sep 2017 14:20:15 +0000http://get3dsmart.com/?p=4185No business can survive without capital. Finding it is another matter. We’ve written a lot about the chicken and egg dilemma of revenue vs. resources. You know the deal… You can’t create revenue without resources, and you can’t get resources until you generate revenue. Investment Capital Roughly $25 billion in early stage venture capital was

]]>No business can survive without capital. Finding it is another matter.

We’ve written a lot about the chicken and egg dilemma of revenue vs. resources. You know the deal…

You can’t create revenue without resources, and you can’t get resources until you generate revenue.

Investment Capital

Roughly $25 billion in early stage venture capital was invested in the U.S. last year. Nearly half of that originated out of Silicon Valley. It’s another chicken and egg scenario. The closer you get, the more competitive it gets. The farther away you go, the smaller the pie. Little fish in an ocean, or big fish in a puddle? Your choice.

Debt

3D printing is a hardware business. Getting hardware to market is a slow and expensive proposition. Even if you can get your products manufactured and shipped, you’ll need to float the inventory and receivables.

3D Printing Is Underserved

Sure, some big deals have been done in 3D printing. Companies like Carbon and Desktop Metal got big resources right out of the blocks. But for every Silicon Valley darling, there are thousands of startups that are just trying to get out of the gates. Small teams with big goals. They need resources too.

Get3DSmart Partners With EquityNet

At Get3DSmart we’re committed to helping companies capitalize on big opportunities in 3D printing. But no matter how big an organization, the chicken and egg dilemma is ever present.

We’re determined to help solve it.

That’s why Get3DSmart has partnered with EquityNet to help companies get the capital they need to grow their 3D printing businesses.

Whether you need a loan or an equity investment, EquityNet has access to it all. EquityNet’s lending partners provide a wide variety of loan options with a billion to business commitment. The accredited investors in the EquityNet community review all types of opportunities, providing funding and insights.

Solve your chicken and egg dilemma today!

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]]>http://get3dsmart.com/2017/09/19/get3dsmart-partners-equitynet-capital/feed/0Who Will Own 3D Printing’s Revolutionary Infrastructure?http://get3dsmart.com/2017/08/28/3d-printings-revolutionary-infrastructure/
http://get3dsmart.com/2017/08/28/3d-printings-revolutionary-infrastructure/#respondMon, 28 Aug 2017 14:13:53 +0000http://get3dsmart.com/?p=4169Revolutionary infrastructure will be needed to drive the sale of 3D printed consumer products. But, who will build it? Brands or retailers? I might have been wrong about retail. A few years ago, I was convinced that eventually, a large chunk of 3D printing would happen in stores. McKinsey research at the time suggested that

Revolutionary infrastructure will be needed to drive the sale of 3D printed consumer products. But, who will build it? Brands or retailers?

I might have been wrong about retail. A few years ago, I was convinced that eventually, a large chunk of 3D printing would happen in stores. McKinsey research at the time suggested that by 2025, 5-10% of consumer products could eventually be 3D printed. Retailers had the product expertise and proximity to the customer.

It could have allowed them to own the intersection of digital and physical.

But for many reasons, retail is broken. Brands have taken notice, and now they’re bypassing retailers in favor of a direct-to-consumer (DTC) model.

Brands and Retail

In the past, brands were more comfortable with risk, knowing that if they invested enough, their product had a good chance of being successful.

They spotted trends and used merchandising data to forecast demand. Then they’d buy product in bulk. They spent big bucks on packaging, displays and other in-store advertising. Then they invested even more, buying TV and radio ads to build brand awareness, while also investing in cooperative advertising to help align their brand with specific retailers.

When the market went digital, eCommerce changed the way brands marketed themselves. But it really didn’t reduce the investment they made to drive sales of their products. Instead of displays and signage, they spent money on copywriting, product photography and everything else it took to create compelling product listings. Then, instead of spending money to drive traffic to stores, they spent it driving customers to other people’s websites.

Private Label

While all of this was going on, retailers were busy developing their own private label alternatives. Tool companies like Dewalt and Black & Decker found themselves competing with Craftsman. Office supply companies like Avery Dennison found themselves competing with Staples house brand. In grocery, consumer packaged goods companies were competing with Walmart’s Great Value.

By 2013, private label brands had taken a major chunk of retail sales. In food and beverage they made up 18% of the U.S. market. In countries like Switzerland, Spain and the UK, they accounted for over 40% of sales in their respective categories.

The proliferation of private label brands isn’t slowing down. In 2016, total annual sales of store brands across supermarkets, drugstores and mass merchants grew to $118.4 billion, an all-time record according to Nielsen.

At Cincinnati based Kroger, private brand operations now account for almost $23 billion – more than 25% of total grocery sales (excluding fuel and pharmacy) – which is an increase of nearly 50% since 2012.

It’s not just brick-and-mortar either. A recent Quartz article identified at least 19 different brands that are owned by Amazon. They offer products in many different categories, including clothing, shoes, baby care, tech accessories, tools, and yes, even spare parts.

Impact on Brands

So brands make a massive investment in getting their products to market and their retail partners reward them by developing a competing private label brand.

One can see why brands might take offense. But what to do?

Direct-To-Consumer

Brands in many different product categories are beginning to sell directly to consumers. In the online world, new technology makes it easier than ever before.

Consider the automaker Tesla. Since it’s inception, Tesla has bypassed the traditional dealer network used by practically every other car company. Instead, their customers order online and visit company owned service centers.

Or what about Dollar Shave? They’ve removed the friction from buying razors in-store, by selling them online. Are they necessarily better? Or just more convenient?

Then there’s Canyon bicycles. At the higher end, the bicycle industry has been dominated by names like Specialized, Cannondale, Trek and Giant. All of them sell their products through bike stores and other dealers. Since its founding in 2002 Canyon has only sold online, direct to consumers. They’re able to sell a comparable bike for about 25% less than their competition.

Makes a lot of sense when you think about it. Bikes are bulky, big-ticket items, and it’s difficult for any shop to carry every product a manufacturer sells. Online, the company can not only sell all of its SKU’s, it can also provide other information like reviews, research and product photography.

In the 1960’s Schwinn announced they would no longer sell through distributors, instead selling directly to bike shops. Canyon USA President, Blair Clark noted that DTC is the “next frontier.”

In the article linked above, he noted that:

“The consumer is driving this change across all industries, whether it’s razors or buying your coffee, or now Amazon purchasing Whole foods, or Zappos and shoes. So we are, I think, hitting the market in terms of timing that’s very ideal from the standpoint that a consumer is ready to purchase a bike online.”

Established Brands Also Going DTC

It’s not just startups. Even established consumer goods companies are putting more effort towards the direct-to-consumer model.

Last year, between its retail stores and online presence, DTC made up nearly 25% of Nike’s sales. In June, the company announced its Direct to Consumer Offense. With it, they are hoping to hit a “triple double.”

Nike wants to increase innovation, speed, and direct connections with consumers – all by double. Their goals are to focus on core categories (running, basketball, training, etc.) while cutting product development cycles in half. They’re also aligning their eCommerce, physical stores and digital products under one team to enhance and expand Nike’s “membership experience.”

They’re not alone. Earlier this year, golf brand Ben Hogan voluntarily filed for bankruptcy. The intention was to “hit the reset button” while the company revamped its strategy.

Just this month the company announced it’s new direct-to-consumer model.

It wasn’t an easy decision. At the time of the announcement, CEO Scott White said, “There was a lot of discussion, a lot of gnashing of teeth, pulling of hair and even conversations about ‘Do we just close this thing down?’ None of us wanted to do that because we all believe there is a place for the Ben Hogan brand in the golf industry.”

He added that:

“It’s a delicate balancing act, and I can tell you that if this were five years ago, we wouldn’t have gone this route. But as e-commerce in general becomes more popular, this is the way of the future so I don’t think there is any kind of a negative connotation associated with it anymore.”

Benefits of DTC

For consumers, there are clear benefits, including:

Depth of Catalog – They get access to more of a brand’s products

Authenticity – They can buy with confidence, knowing it’s not a counterfeit

Superior Service – Returns and other customer issues are handled directly

Replacement Parts – Brands are more likely to support their own products

For most brands the benefits of a DTC model fall into four categories:

Experience – They can better control the way consumers perceive the brand

Relationship – By going direct, they can market one-to-one

Data – By owning the data, they can cross-sell, up-sell and grow lifetime value

Margins – Flattening the supply chain returns money that can be used in other ways

How much money? In some cases, brands have hundreds of millions stuck in old distribution systems. A direct-to-consumer model allows them to free some of it…but not all.

Investment in Branding

If you look at the startups who are successfully selling direct-to-consumers, one consistent attribute is that almost all of them made a significant investment in branding, and they did it early.

Existing companies with well known brand names have less of that to do. But they still have to drive traffic to their own websites and stores.

Capital Dilemma

Whether they go through retail or direct-to-consumer, brands still must produce the products they wish to sell. With physical goods, that involves a lot of capital.

Warby Parker Sunglasses

If you want to be the next Warby Parker, you’ll need a catalog of appealing eyeglass frames that people actually want to buy. You need merchandisers who can trend spot and forecast demand. Based on their recommendations, you spend a significant sum to have those frames manufactured, packaged, and staged for distribution.

You hope they chose wisely. If they did, you sell your products at a high margin. If they didn’t, you liquidate.

How much does an endeavor like that cost? Warby Parker has raised hundreds of millions of dollars and still isn’t profitable. Much of that has been spent on product, branding, and building out the DTC channel (including dedicated brick-and-mortar stores.)

But what if you didn’t have to spend all that money up front?

3D Printing to the Rescue

The economics of 3D printing are such that it can greatly reduce the upfront investment that brands make in product. Instead of buying in bulk, companies can utilize just-in-time manufacturing to significantly reduce their inventories. They can even produce products “on demand,” eliminating more of their supply chain cost.

Before going further down this path, I should note that there are two big lies floating around the 3D printing market. People will tell you that unit costs are flat and that complexity is free. Neither are true, and in this recent article, I explain why.

But, the fixed costs of 3D printing are much lower than with mass manufacturing. This can create a significant advantage for a company looking to disrupt an established competitor. It could also help an established brand defend against disruption.

Revolutionary Infrastructure

Is it too revolutionary? I believe that depends on how it’s sold. People probably won’t buy your product just because it’s 3D printed, but they do recognize the benefits. More selection, quicker time-to-market, good quality and reasonable cost are all very appealing. Customization and personalization are also enticing, but as I’ve said before, that comes with its own share of friction.

Depending on where products are manufactured, 3D printing can also help drive even more cost out of the supply chain. Brands basically have three options. They could produce in a central location and deliver 3D printed products the same way they do now.

They could also create or utilize a network that allows them to produce their products locally. Moving digital files is much cheaper than moving physical products, but it takes a big investment in revolutionary infrastructure.

The third option is to use a combination of the two. In practice, this is probably the most likely solution. In the Warby Parker example, orders placed online could be printed centrally and shipped to the customer. Brick-and-mortar customers could watch their orders being produced in-store.

What About Retail?

As I said at the beginning, retailers should be investing in their own 3D printing infrastructure. But they’re not. If brands want to leverage the power of digital manufacturing, it looks like they’ll have to do it on their own.

Assuming they do, 3D printing could be the final nail in retail’s coffin. It’s a shame really. Can you think of another game-changing technology in the last 10 years that was actually a benefit for brick-and-mortar stores? eCommerce and mobile certainly weren’t. It’s doubtful that technologies like artificial intelligence and virtual reality will be either.

Brands have learned that retailers aren’t their allies. They’re cost centers. That’s why there’s so much interest in the direct-to-consumer model. 3D printing has the potential to accelerate that trend.

When the disruption happens, retailers will try to get on board. But if history is any guide, it will once again be too late. Their private label alternative won’t be as compelling if a name brand isn’t sitting right next to it. Retailers will actually have to innovate. They’ll also have to invest. Can they do it without the support of major brands? Time will tell.